Switzerland votes 'yes' to keeping big business
Switzerland has approved an overhaul of the corporate tax code, choosing to stay an attractive base for companies such as Procter & Gamble, Vitol and Caterpillar even at the expense of a short-term drop in fiscal revenue.
The change was approved by 66pc of voters, according to a projection published by Swiss television SRF. A poll by gfs.bern had suggested it would pass.
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The outcome, which ends years of wrangling and a failed attempt at an overhaul two years ago, ensures Switzerland remains a low-tax domicile for companies and still is compliant with international rules.
The new system will consist of deductions on profit from patents and R&D expenses to make up for having to get rid of the breaks now accorded to multinationals.
That's because they no longer are in line with Organisation for Economic Co-operation and Development rules.
A failure to pass the reform could have sparked an exodus of firms to low-tax locales such as Ireland or Singapore because in Switzerland they would have been taxed at the same rate as local companies - which in Geneva is currently as high as 24.16pc.
That could have been devastating for the economy. Multinationals generate about a quarter of employment and a third of gross domestic product, according to a study by McKinsey and industry group SwissHoldings.
They're also responsible for a big chunk of the federal government's revenue from taxing firms' profits.
Cantons are also taking action on taxation. The cantons of Basel City has lowered its levy on companies, as has the French-speaking canton of Vaud. In Geneva, the electorate approved a headline rate reduction to 13.99pc in a local ballot, according to an initial vote count.